Airlines told to exercise moderation in pricing tickets amid hike

NEW DELHI: The government has asked airlines to exercise moderation and ensure a balance in pricing of air tickets amid a spike in airfares on certain routes especially after suspension of flights by crisis-hit Go First, according to a senior official.

While making it clear that there are no plans to regulate airfares, the official said there should not be a huge gap between the tickets sold in the lower and upper fare buckets by the airlines.

India is one of the fastest growing civil aviation markets in the world and domestic passenger traffic has been rising after being significantly impacted by the coronavirus pandemic.

After cash-strapped Go First stopped flying from May 3, there has been a significant rise in airfares on certain routes that were operated by the budget carrier. The routes include Delhi-Srinagar and Delhi-Pune. Also, the reduction of capacity due to the Go First crisis has come at a time when peak domestic air travel period is round the corner.

The senior civil aviation ministry official told reporters that airlines have been asked to ''exercise moderation'' and ''maintain some kind of balance'' in terms of pricing of tickets.

There cannot be a situation where there is a huge gap between the lowest and highest fare buckets, and passengers should not face hardships in terms of exorbitant fares, the official said on the condition of anonymity.

There are no plans to regulate airfares, the official said.

Go First, which is undergoing voluntary insolvency resolution proceedings, has cancelled flights till May 26. Besides, many planes of IndiGo are grounded due to Pratt & Whitney engine issues while SpiceJet is also facing financial headwinds. The official noted that capacity is an issue and hoped that resumption of flights by Go First at the earliest would help ease the situation before the peak travel season in June.

In April, domestic airlines flew 128.88 lakh passengers, as per the latest official data.

There has been a steep jump in airfares on certain routes where Go First was operating.

For instance, the average one-way spot fare on Delhi-Leh route saw a 125 per cent rise to an average of Rs 13,674 during the May 3-10 period compared to April 20-28 period, as per data shared by travel portal Ixigo.

During the same comparable periods, average one-way spot fare witnessed an increase of 86 per cent to Rs 16,898 on Delhi-Srinagar route, the data showed.

After deregulation of the country's airline sector, airfares are market driven and are neither established nor regulated by the government. Airline pricing runs in multiple levels (buckets or Reservation Booking Designators).

Civil aviation minister Jyotiraditya Scindia, on March 16, informed the Lok Sabha that ''airfares are neither established nor regulated by the government''.

''The airline pricing system runs in multiple levels (buckets) which are in line with practices being followed globally. The prices are fixed by airlines keeping in mind the market, demand, seasonality and other market forces. The airfare increases with increase in demand for seats as the lower fare buckets get sold out fast when bookings are offered by airlines,'' he had said in a written reply.